Italy's central bank mandates sanctions screening for crypto transfers
Italy mandates sanctions screening for crypto transfers
Banca d’Italia ordered crypto service providers to put internal controls that screen transfers linked to sanctioned entities. The move is meant to enforce EU financial sanctions on cryptocurrency transactions.
Key points
- Crypto asset service providers (CASPs) must adopt policies to identify customers and transactions tied to sanctions.
- The requirement applies to all crypto transfers processed in Italy.
- EU sanctions aim to block illicit flows involving Russia and Iran.
Official announcement
In a Monday communication, Banca d’Italia said CASPs must establish adequate internal controls to enforce EU sanctions when handling crypto transfers. The bank emphasized the need to identify both customers and transactions linked to sanctioned entities.
Context from other reports
Russian and Iranian actors have been reported to use cryptocurrencies to evade sanctions. A Russian ruble‑backed stablecoin (A7A5) processed about $110 billion in transactions between February 2025 and May 2026, despite Western sanctions, according to CertiK. Iran’s central bank has encouraged the use of Tether (USDT) and Bitcoin for cross‑border payments. In July, U.S. authorities froze more than $130 million in crypto linked to Iran’s central bank, and TRM Labs reported over $3.8 billion flowing between the exchange CoinEx and sanctioned Iranian entities over several years.
Confirmed facts
- Banca d’Italia issued a directive for CASPs to screen crypto transfers for sanctions.
- The directive was published on 9 September 2026.
- EU sanctions target illicit financial activity involving Russia and Iran.
Why it matters
By requiring sanctions screening, Italy aims to bring crypto transactions in line with traditional financial compliance. This could reduce the use of digital assets for evading EU sanctions and improve overall market integrity.
Next steps
Crypto service providers operating in Italy must develop and implement the required policies and controls. The central bank has not specified a detailed timeline, but compliance is expected to be enforced promptly.
